Arizona’s MLS (Multiple Listing Service) Loses Over 20% Of Its Members
It wasn’t something they wanted to do either - it was a purely financial decision. The National Association of Realtors constantly sells how wonderful life as a real estate agent is. How, while we’re going through a “hiccup”, it’s a great place to work! It’s going to be interesting to see how the NAR spins this, if they cover it, that is.
The listing service Valley real-estate agents use to advertise homes for sale canceled more than 20 percent of its memberships this month after raising fees by about 70 percent in June.
“In July, we had to turn off 8,000 agents due to non-payment,” said Bob Bemis, Arizona Regional Multiple Listing Service chief executive officer.
Bemis said he was expecting about 4,500 agents to drop the service, which renews memberships annually on July 1, mainly because so many of them are leaving the business.
“It’s been going on nationwide,” Bemis said, adding that the real-estate industry expects to lose 150,000 agents this year across the country.
Membership in the service went from about 36,000 in June to 28,000 in July, but Bemis said he expects about 3,000 of those former members to rejoin.
However, it’s also a financial decision for the real estate agents that realized that you can’t just go to school, take your license, pass your test, join the NAR and MLS, and start your way to a six figure income.
Tens of thousands of agents have signed up in the past few years to try their hand at closing that sale and realizing the first steps of financial independence. However, seasoned agents know that in a good market you’re artificially supported and if you don’t realize it and work twice as hard, when the tide falls, you’ll be stuck on dry land.
It’s all part of bubbles though. Many were left jobless when the dot-com bubble burst. This will be no different.
Although, I don’t know if too many will admit to that. I thought this was an interesting exchange in the comment section of the article:
“Average Homebuyer/Homeowner”:
Compared to a high school teacher, real estate agents who have no need to be educated, get paid way too much. Their pay should be about 2o to 30 dollars per hour, same as a RN at a hospital. Seriously, that’s all and that is what it may come down to in a few years. 6% is too much in this age of internet.
“Average Real Estate Agent”:
I don’t know where you get the idea that real estate agents don’t need to be educated. Agents need a specialized education to obtain and sustain their licenses. We also need to stay on top of changes in the law regarding contract verbiage and disclosures. We need to be able to analyze relevant data as it pertains to the market in general, but more specifically, to our individual clients. In We also must be proficient in marketing and lead generation, home staging, financing options, photography, creative writing, home repair and babysitting. The babysitting comes in when we have to stay in constant contact with buyers, sellers, mortgage companies, inspectors, home repair services and a myriad of involved parties to make sure that a transaction actually closes. And, if for some reason, any detail along the way is overlooked by anyone, it’s our butt on the line. We are constantly researching and applying new technology and information to make sure our clients get the very best service.
We pay up front and out of our own pockets on behalf of our clients with no guarantee of recovering those costs. Between licensing fees, required services and everything else we must provide in order to be effective and competitive in the marketplace, that 6% commission you refer to is substantially diluted. Now divide it by 2, because the majority of transactions involve both a buyer’s agent and a seller’s agent. Add in $4 a gallon for gas. Subtract the fees paid to the broker and the taxes paid to Uncle Sam.
We provide a valuable service to our clients and we earn every penny of our commission.
Compare that to a movie star, rock star or professional athlete. No one seems to question how much they are “entitled” to make. I wonder what you think their salary should be, given their educational requirements.
When you use only internet services for the sale or purchase of your next home, and deal with all of the things that need to be done to get through close of escrow, I’ll bet you’ll wish you’d paid a qualified agent that commission.
While the agent does bring an interesting perspective, sales is a tough market and real estate agents aren’t immune to droughts that hurt other sales markets either. You do have to pass a test and you do need to remain knowledgeable. But many brokerages now handle the escrow and transaction part of the sale for a fixed fee as well. Many are finding that with lots of photos, a Craigslist posting, and some additional marketing - it’s possible to do the work of an agent at a fraction of the time and price.
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Personally, I imagine it’d be pretty easy to market a house nowadays. My last realtor did little to hold open houses or market. We used him for lack of a better option, but also paid out the pants for it too. Our escrow was done fast and without issue, so I think that may be what we do next time..